Benzinga - by Aaron Bry, Benzinga Editor.
In a potential warning sign to investors, three high-flying stocks had key reversals on Tuesday.
This means the stocks opened to new highs before trading below their previous closing price.
Three of the hot stocks that experienced key reversals Tuesday were NVIDIA Corp (NASDAQ: NVDA), Eli Lilly and Co (NYSE: LLY) and Super Micro Computers Inc (NASDAQ: SMCI), each of which made new all-time highs before sharply reversing to the downside.
At one point Tuesday, Nvidia, one of the market’s best performers of the year so far, was trading down more than 4% from Tuesday’s open price of $696.30, according to Benzinga Pro.
Nvidia and Super Micro Computer shares recovered throughout the afternoon, trading well off their intraday lows. Late in Tuesday’s session, Nvidia was trading around $678 per share, more than $15 higher than its lows of the day.
Eli Lilly’s stock traded higher in Tuesday’s premarket session following a strong earnings report driven by high demand for the company’s weight loss drugs. Yet after opening at new all-time highs of $742 a share, the stock reversed to the downside as traders appeared eager to take profits, driving the price down more than 6% to lows of around $691.
Like Nvidia and Super Micro Computers, Eli Lilly stock recovered off of its lows of the day and made back some of its losses.
Read Also: Investors Cheer Eli Lilly Earnings, Q4 Performance Surpasses Expectations Thanks To Strong Zepbound Launch, Surging Weight Loss Drug Sales
Super Micro Computer, Nvidia and Eli Lilly have been darlings of the market so far to start 2024. The stocks are up more than 130%, 40% and 17% year-to-date, respectively. Strong demand for chips with artificial intelligence capabilities has been tailwinds for Nvidia and Super Micro Computer, while weight-loss drugs have been a major growth driver for Eli Lilly.
Some investors have been anticipating a pullback in tech names like Nvidia and Super Micro Computer following their strong rallies.
Derrick Oldensmith, a trader at T3, joined Benzinga’s "PreMarket Prep" program Tuesday and told the hosts that Nvidia could be setting up for a short trade.
Watch the full interview here:
Read Next: Nvidia Is Banking On Chatbots, AI To Speed Up Chip Design Amid Growing Demand: Report
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